A report released by http://privateequitycompensation.com/ indicates the private equity and venture capital markets are continuing to enjoy increases in compensation and that the trend that will extend into 2012.
2011 brought with it plenty of fund raising activity and, it was clear from the report, the success of that activity was all over the board. The smaller funds continue to do most of the work, yet the larger funds get most of the money. This inequity is partially responsible for over half of respondents indicating they have some job security concerns.
Despite smaller assets under management, employees at smaller firms reported higher earnings and some guaranteed bonuses. “We believe the demand for private equity talent in the larger firms is forcing the smaller firms to keep pace, in order not to lose their most talented players,” says David Kochanek, publisher of PrivateEquityCompensation.com.
For the second year in a row, private equity professionals reported a solid increase in total earnings over the previous year, with the average cash earnings coming in at $248,000 USD, coming in the form of both increased base salaries and bonuses. The average expected increase was 6 percent and, again this year, more than 40 percent of professionals expected double digit increases over last year.
Will this positive trend continue? “We believe 2012 will bring with it increased base salaries and healthy bonuses once again,” said Kochanek. “Expect continued demand for investment professionals and talented operationally-focused players to work in portfolio companies — even if the economy continues to show lackluster improvements.”
